Question-and-Answer Session
Operator
(Operator Instructions) And your first question comes from John Larkin, you may proceed.
John Larkin
First question related to perhaps little more information you can share with us regarding the covenance that you are apparently thinking you can pump up against your -- in the coming couple of quarters. Is there one particular covenant that is the type is -- could you define what that is and then let us sort of asses as to how much levy you have there currently.
Mike Ryan
The covenant that would be of issue would be the leverage covenant and the reason for that is it’s currently at the 3.25 to 1 leverage. At the end of the second quarter it sets down to 3.0. I don’t want to give any information as to the forecast -- because it is the forecast that somewhere we will send at the end of the quarter in terms of the covenant, but as I said on the call, we have a number of various alternatives available to u s that would enable us to stay in compliance and one of those options being an amendment of the credit facility, but we are in a compliance at the end of the first quarter and we believe we have various options to remain in compliance at the end of the second quarter.
John Larkin
Have you commenced discussions with the Bank group regarding an amendment?
Thomas Pilholski
We are always in discussions with the bank group and that’s just one topic that would generally come up in terms of what the status of our covenance is. Again we are just always in discussion with the bank groups.
John Larkin
That’s very helpful. Had a may be a broader question from Mike regarding your targets to move the mix of business towards less cyclical or less seasonal, less profit market oriented business and it seems like you are making some pretty good progress there. I guess the question is where is this business coming from; how of it is coming from rail, is any of it coming from other modes and what is the competitive reaction here; are you having to discount to capture incremental share in these more attractive segments? How is that planning out for you?
Tom Pilholski
Actually the volumes that we are attracting; there is two real streams and some are expansions of existing flows whether its raw material or intermediate products that we are starting to assign more equipment to and starting to handle, so we are seeing expansion it with customers that we have today on their existing water program but we do have wins here and in contract and ratable basis that is coming from the rail road and that we -- you really don’t have to prices it that aggressively because its already at a pretty -- fairly decent price. It’s more a service related event that we have been able to provide a multi movable solutions to as far as an option to rail.
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